2013 (4) TMI 618 - AT - Central Excise

Rejection of refund claim - reduction of price subsequent to clearance of the goods - department issued show-cause notice proposing to reject the refund claim on the ground of limitation and also not hit by the unjust enrichment. Held that - when an assessee claims refund of duty on the basis of price variation under the price variation clause of the relevant contract subsequent to clearance of the goods, the claim, for whatever reason, cannot be allowed. Such fluctuation in price subsequent to clearance of the goods cannot affect the manufacturers liability to pay excise duty. - The ruling of the Apex Court in MRF Ltd. v. Collector of Central Excise, Madras 1997 (3) TMI 104 - S.C. followed - Refund claim rejected - price variation clause itself is not a ground to consider the assessment as provisional assessment - Decided against the assessee.

Summary

Issues:
- Rejection of refund claim
- Time limitation for refund claim
- Applicability of price variation clause
- Unjust enrichment

Rejection of Refund Claim:
The appellant, engaged in manufacturing explosives, filed a refund claim after a contract price variation with the buyer, seeking a refund of duty amounting to Rs. 5,83,135. The claim was rejected by the Assistant Commissioner as time-barred, despite no unjust enrichment issue. The Commissioner (Appeals) upheld the rejection, leading to the present appeal.

Time Limitation for Refund Claim:
The appellant argued that the refund claim was filed within the statutory period, citing precedents like Telephone Cables Ltd. case. The department contended that the claim should not be granted, referring to the MRF Ltd. case ruling by the Supreme Court. The Tribunal rejected the appellant's argument, stating that the Apex Court's ruling applied, emphasizing that subsequent price fluctuations do not impact excise duty liability.

Applicability of Price Variation Clause:
The Tribunal emphasized that the manufacturer's liability to pay excise duty is based on the price at the time of goods clearance, unaffected by subsequent price changes. The Tribunal followed the MRF Ltd. case consistently, dismissing the appellant's claim based on the price variation clause. The argument for provisional assessment due to the price variation clause was rejected as unsupported by statutory provisions.

Unjust Enrichment:
The Tribunal deemed the plea regarding unjust enrichment inconsequential, given the inadmissibility of the refund claim as per the Supreme Court's ruling. The appellant's argument that self-assessment was provisional due to the price variation clause was dismissed, reiterating that provisional assessment requires prior permission and finalization by the proper officer.

In conclusion, the Tribunal dismissed the appeal, upholding the rejection of the refund claim based on the time limitation and the applicability of the price variation clause as per the Supreme Court's ruling. The judgment highlights the importance of adherence to statutory provisions and established legal precedents in excise duty refund cases.